Deducting the use of a home office has never been easier due to some recent changes by the IRS.
Starting with your 2013 tax return, if you’re eligible for a home office deduction, you can use a new simplified option that can save you a lot of time. It requires less paperwork and record-keeping.
Instead of basing the home office deduction on your actual expenses, this option allows most taxpayers to simply multiply the square footage of your office by a prescribed rate.
The new optional deduction is capped at $1500 based on $5 per square foot up to 300 square feet.
If you use this method, you cannot depreciate the portion of your home you used in your trade or business, but you can still deduct business expenses such as advertising, supplies, and wages paid to employees.
If you itemize, your deductible home-related expenses should be deducted in full on Form 1040 Schedule A. Other restrictions may apply.
For more details on the new optional deduction, visit IRS.gov.